General Insurance Principles

Question 1

Moral Hazard

Answer 1

Lies

Question 2

Morale hazard

Answer 2

*If it breaks, my insurance will pay to replace it.

Question 3

Consequential Losses

Answer 3

Indirect loss

Question 4

Forced Entry with felonious intent (trespassing into a building and stealing)

Answer 4

Burglary

Question 5

Taking property from the care and custody of someone by causing or threatening to harm (taking a vehicle on GTA)

Answer 5

Robbery

Question 6

Act of stealing and encompasses both burglary and robbery

Answer 6

Theft

Question 7

A single property insurance policy that provides coverage for multiple classes of property at one location

Answer 7

Blanket Insurance

Question 8

A property insurance policy that covers a specific kind or unit of property for a specific amount of insurnance

Answer 8

Specific Insurance

Question 9

2 types of compensatory damages

Answer 9

Special and general
Special - Specific out-of-pocket expenses for medical, misc, and loss of wages
General - pain and suffering, mental anguish, disfigurement, and other similar losses.

Question 10

What is a factor in determining the premium charged?

Answer 10

Loss Valuation

Question 11

Method of valuation reinforces the principle of indemnity.

Answer 11

Actual Cash Value

Question 12

Replacing damaged property with like kind and quality at today’s price

Answer 12

Replacement Cost

Question 13

Amount a willing buyer would pay to a willing seller

Answer 13

Market Value

Question 14

An amount of insurance scheduled in a property policy that is not subject to any coinsurance requirements in the event of a covered loss

Answer 14

Stated Value

Question 15

An estimated value an asset will realize upon its sale at the end of its useful life

Answer 15

Salvage value